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TORONTO, Aug. 8, 2013 /CNW/ - Black Birch Capital Acquisition III Corp.
(TSXV: BBC.P) ("Black Birch" or the "Company") is pleased to announce that it has entered into a letter of intent
(the "LOI") dated July 30, 2013 with Daymak Inc. ("Daymak"), a corporation existing under the laws of Ontario, which outlines the
general terms and conditions pursuant to which Black Birch and Daymak
intend to complete a transaction that will result in Black Birch
acquiring all of the issued and outstanding securities of Daymak. The
transaction will constitute Black Birch's qualifying transaction (the "Qualifying Transaction") under the policies of the TSX Venture Exchange (the "Exchange"). Following completion of the Qualifying Transaction, it is
anticipated that the resulting issuer (the "Resulting Issuer") will be a Tier 1 company.
Terms of Acquisition
Under the terms of the LOI, Black Birch will acquire all of the issued
and outstanding securities of Daymak in exchange for equity in Black
Birch, as further described below (the "Transaction"). It is currently anticipated that the Transaction will be effected
through a "three-cornered amalgamation" (the "Amalgamation"), whereby: (i) Daymak will amalgamate with a newly incorporated
company incorporated under the laws of Ontario and wholly-owned by
Black Birch, to form an amalgamated corporation ("Amalco"); (ii) the holders of Daymak's common shares will receive 19,475,000
common shares of Black Birch ("Common Shares") at an ascribed value of $0.40 per Common Share and the holders of
Daymak's options and warrants will receive approximately 3,781,204
options and warrants of Black Birch; and (iii) Amalco will become a
wholly-owned subsidiary of Black Birch. The final structure of the
Transaction is subject to receipt of definitive tax, corporate and
securities law advice satisfactory to both Black Birch and Daymak.
Pursuant to the terms of the LOI, completion of the Qualifying
Transaction will be subject to a number of conditions, including
receipt of gross proceeds of not less than $3,000,000 pursuant to the
QT Financing (as defined and described below), completion or waiver of
sponsorship, receipt of all required regulatory approvals, including
the approval of the Exchange of the Qualifying Transaction, completion
of all due diligence reviews, satisfaction of the minimum listing
requirements of the Exchange and all requirements under the Exchange
rules relating to completion of a Qualifying Transaction, and execution
of a definitive amalgamation agreement.
The proposed Qualifying Transaction is not a "Non-Arm's Length
Qualifying Transaction" within the meaning of Policy 2.4 of the
Exchange and, as such, shareholder approval is not required, unless
otherwise required by the Exchange.
Sponsorship of a qualifying transaction of a capital pool company is
required by the Exchange, unless exempt in accordance with Exchange
policies. Black Birch intends to apply for an exemption from
sponsorship requirements, however, there is no assurance that Black
Birch will obtain this exemption.
A filing statement in respect of the proposed Qualifying Transaction
will be prepared and filed in accordance with Policy 2.4 of the
Exchange on SEDAR at www.sedar.com no less than seven business days prior to the closing of the proposed
Qualifying Transaction. A press release will be issued once the filing
statement has been filed, as required pursuant to Exchange policies or
any other material changes occur.
Black Birch currently has 5,109,850 Common Shares issued and
outstanding, as well as options and warrants to acquire Common Shares.
There are 510,985 options that entitle the holders thereof to acquire
an aggregate of 510,985 Common Shares at a price of $0.10 per share.
There are 310,985 warrants that entitle the holders thereof to acquire
an aggregate of 310,985 Common Shares at a price of $0.10 per share.
Under the terms of the LOI, Black Birch will undertake a 2.67:1 share
consolidation such that it will have 1,916,194 Common Shares issued and
outstanding with a corresponding adjustment taking place to the options
and warrants. On a pre-consolidation basis, the Transaction is being
done at an ascribed value of $0.15 per share which equal $0.40 per
share on a post-consolidation basis.
Daymak currently has 165.03 common shares outstanding and approximately
32 options and warrants outstanding at strike prices ranging from
approximately $36,000 to $70,000. Prior to the Transaction, Daymak
shall undertake an 118,009:1 stock split such that there will be
19,475,000 common shares of Daymak issued and outstanding. Each Daymak
post-split common share shall be exchanged for one post-consolidation
Black Birch Common Share. Daymak options and warrants shall also be
Post-consolidation, and without taking into account the QT Financing (as
described below), the Resulting Issuer will have approximately
21,391,194 common shares and 4,089,442 options and warrants issued and
It is a condition of the LOI that concurrent with the completion of the
Qualifying Transaction, Daymak and Black Birch shall complete a
brokered private placement (the "QT Financing"), for minimum proceeds of $3,000,000 and maximum proceeds of
$5,000,000. Daymak and Black Birch intend to engage a broker in short
order and will issue a press release updating the status of the QT
Financing when more information is available.
Daymak will use the proceeds of the QT Financing to continue to grow its
retail presence in Ontario; develop and grow dealer networks in the
province of British Columbia and Quebec; develop and grow the ADP
certified mobility scooter division in Ontario; develop and grow its
on-line presence; continue to grow and expand its US market through the
US Shopping Channel; continue spending on research and development;
and, fund general corporate expenditures.
Daymak, a Toronto-based company incorporated in 2002, is a leading
developer and distributor of personal light electric vehicles with over
100 dealers across Canada. Daymak's alternative personal light electric
vehicles consist of street legal electric bikes, ATVs, scooters and
mobility scooters which are now ADP approved.
Daymak has also developed and commercialized personal light electric
vehicles based on its proprietary Daymak D-Drive technology. The Daymak
D-Drive Controller is composed of two proprietary components, a
microprocessor that generates more power, speed and distance to
existing electric vehicles and an electric circuit board which is
designed to increase and maximize the input/output capabilities of all
electric components safely. Daymak has designed, developed and
manufactured the world's first wireless electric bicycle, the patent
pending Shadow Ebike. Daymak's accolades include the Clean Tech North
Award, Profit Magazine's Top 100 & 200 Canada's Fastest Growing
Companies and Top Women Entrepreneurs Award in 2008.
In present market conditions, consumers are looking for affordable
recreational vehicles. Also, with an increasingly strong green
environmental movement around the world, Daymak believes that the need
for fuel efficient vehicles and innovative technologies will be in high
Daymak Financial Information (based on unaudited financial statements)
In 2012, Daymak recorded revenues of $7,276,309, up 20% from $6,057,476
in 2011. Net income in 2012 was $240,269, up from $212,753 in 2011.
Since 2008, Daymak has been growing and profitable every single year.
Both sales and profit have almost doubled since 2008. At December 31,
2012, Daymak had total assets of $5,412,029 and working capital of
Proposed Management and Directors
As part of the completion of the Qualifying Transaction, Daymak's
current management will assume responsibility for the Resulting Issuer
and the Resulting Issuer's board of directors will be comprised of Paul
Haber, Kin-Man Lee, Anthony Pizzaro, Robert Tweedy and Aldo Baiocchi.
The following are brief descriptions of Daymak's management team and
its proposed nominees that will, collectively, assume management
responsibility for the Resulting Issuer upon completion of the
Qualifying Transaction. Messrs. Haber, Lee and Pizzaro are currently
directors of Black Birch and their biographies are available on SEDAR
as part of the prospectus issued in relation to the initial public
offering of Black Birch.
Yeganeh Baiocchi - President: Ms. Baiocchi is the founder of Daymak and is responsible for purchasing,
marketing and sales. Ms. Baiocchi has worked for over 10 years in
various management positions with the Bank of Montreal. In 2008 she was
voted one of Canada's top 100 woman entrepreneurs.
Aldo Baiocchi - V.P. Production & Director: Mr. Baiocchi is responsible for the development of new products and
brings to Daymak over 20 years of experience in sales, marketing and
team management. Mr. Baiocchi was previously at Microforum and Aludra
Inc. where he managed R&D teams that developed several award winning
computer softwares that achieved millions of dollars in sales. Mr.
Baiocchi was responsible in bringing the D-Drive to market. Mr.
Baiocchi will be a director of Black Birch upon completion of the
Kurt Mak - Chief Financial Officer: Mr. Mak has 20 years of extensive operational and senior finance
experience. He has experience with startup operations and with large
public enterprises. He has turned companies around to be profitable and
cash flow positive. He recently raised over $20 million in private
financing and executed a corporate restructuring to better align
corporate values and vision. His past experiences in various senior
roles include Ault Foods, SunBlush Technologies, Bayer Inc., Teknion
Corporation and the Chippery group of companies.
Robert Tweedy - Director: Mr. Robert Tweedy is a corporate director. He is the Chairman of Useppa
Holdings Limited, a private management company. Mr. Tweedy is currently
the Chairman of Aurcana Corporation and STT Enviro Corporation. He is a
trustee of Dundee REIT and an Advisor to MARS. Mr. Tweedy is a past
Director of TransAmerica Life Insurance Company of Canada, Rockwater
Capital Corp., the Toronto Hospital Foundation Board, and has served as
President and CEO of a number of private and public companies. He is a
past Chairman of the Young President's Organization, Ontario Chapter,
and currently a member of the World Presidents' Organization. He earned
his Honours Bachelor of Arts degree from the University of Toronto and
his Master of Business Administration degree from Stanford University.
In 2003, he was awarded the H.M. The Queen's Gold Jubilee Medal.
The Company has requested a halt in the trading of the Company's shares
until the Qualifying Transaction is completed.
The Company will provide further details in respect of the Qualifying
Transaction, in due course by way of press release.
All information contained in this news release with respect to Black
Birch and Daymak was supplied by the parties respectively, for
inclusion herein, and each party and its directors and officers have
relied on the other party for any information concerning the other
Completion of the Qualifying Transaction is subject to a number of
conditions including, but not limited to, Exchange acceptance and if
applicable pursuant to Exchange Requirements, majority of the minority
shareholder approval. Where applicable, the Qualifying Transaction
cannot close until the required shareholder approval is obtained. There
can be no assurance that the Qualifying Transaction will be completed
as proposed, or at all.
Investors are cautioned that, except as disclosed in the management
information circular or filing statement to be prepared in connection
with the Qualifying Transaction, any information released or received
with respect to the Qualifying Transaction may not be accurate or
complete and should not be relied upon. Trading in the securities of a
capital pool company should be considered highly speculative.
Neither the TSX Venture nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture) has in any way
passed upon the merits of the proposed transaction and has neither
approved nor disapproved of the contents of this release.
This press release does not constitute and the subject matter hereof is
not, an offer for sale or a solicitation of an offer to buy, in the
United States or to any "U.S Person" (as such term is defined in
Regulation S under the U.S. Securities Act of 1933, as amended (the
"1933 Act")) of any equity or other securities of the Company. The
securities of the Resulting Issuer to be issued in connection with the
QT Financing have not been registered under the 1933 Act and may not be
offered or sold in the United States (or to a U.S. Person) absent
registration under the 1933 Act or an applicable exemption from the
registration requirements of the 1933 Act.
SOURCE: Black Birch Capital Acquisition III Corp.
For further information:
regarding the Qualifying Transaction, please contact:
Black Birch Capital Acquisition III Corp.
Paul Haber, Chief Executive Officer, Chief Financial Officer and Corporate Secretary
Aldo Baiocchi, Vice President
Telephone: 416-658-3993 ext. 201